PERTH (miningweekly.com) – ASX-listed EcoGraf has updated the economics of its Epanko graphite project, in Tanzania, increasing the project’s pre-production capital cost from the $88.9-million considered in the 2017 bankable feasibility study (BFS) to $134-million.
The initial BFS was based on the production of 60 000 t/y of natural flake graphite products, and would have an initial mine life of 18 years, delivering a pre-tax net present value (NPV) of $211-million and annual earnings before interest, taxes, depreciation and amortisastion (Ebitda) of $44.5-million.
EcoGraf on Friday said that the project was now estimated to have a pre-tax ungeared NPV of $348-million and an average annual Ebitda of $79-million over the initial ten years, with an ungeared internal rate of return of 36%.
As part of the pre-development programme, EcoGraf completed various metallurgical evaluation studies to optimise the mine schedule and process flowsheet, which identified a number of value-adding opportunities for the Stage 1 development. This included an ‘oxide first’ strategy which could deliver a 22% increase in production capacity to 73 000 t/y for a minimal incremental capital cost.
The oxide first strategy would see oxide ore treated for the first 11 years of the operation, and would result in the deferral of $6-million in capital costs that had been provisionally provided for the fresh ore sulphide flotation circuit and lined sulphide tailings pond.
This strategy would also result in lower operating costs associated with reduced blast and drill costs, reduced crushing and milling costs and reduced reagent costs, said EcoGraf.
The company said on Friday that it was evaluating multi-stage expansion of Epanko, and was targeting 300 000 t/y of production.
Epanko is forecast to expand over time to meet growing market demand for battery graphite and is expected to operate for 40 to 50 years. Financial modelling indicates that over that time, economic benefits of over $3-billion will accrue to Tanzania, through employment, procurement, royalties, taxes and dividends. Over 95% of the 300 permanent staff will be Tanzanian, with an estimated 4 500 indirect jobs to be supported by the operation.
The company recently inked a framework agreement with the government of Tanzania, marking a major milestone in the project's development.